Old and still drinking water and eating dry white toast.
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Baltic Supramax Index (NOV 26)1418 UP + 14
Baltic Supramax Index
Market Crash?
The prospect of an eventual end to money printing by the Fed and other major central banks has led analysts to warn of the risk of a market crash.
“[Tapering] is a process that I think is going to be critical – how they tighten versus the steady improvement in the economic conditions that are prompting the increase in rates. So it is an unexploded bomb, but it is one that we are all aware of, we just don’t know when it is going to go off,” Nomura analyst Kevin Gaynor told the Australian Financial Review.
The analyst warned a market crash was possible if central bankers “slam on the brakes too soon” before the economic upturn gained traction.
The consequences of quantitative easing (QE) have been highlighted in a report by the McKinsey Global Institute, which showed that QE has caused a massive transfer of wealth to governments and corporate borrowers, at the expense of households.
According to the report, governments in the eurozone, the United Kingdom and United States “collectively benefited by $1.6 trillion both through reduced debt-service costs and increased profits remitted from central banks,” while nonfinancial corporations gained $710 billion over the period from 2007 to 2012.
However, households lost a collective $630 billion in net interest income, with Japanese households in particular bearing a large burden. In 2013, Japanese households had $9.5 trillion in interest-bearing assets compared to $3.5 trillion in liabilities, with 90 percent of such assets invested in low-interest deposit accounts.
“With government bond yields averaging less than 2 percent, Japanese households have earned very little on their savings for well over a decade,” McKinsey said.
Although QE has inflated the value of stock and house prices around the world, analysts see the eventual start of tapering causing a correction in asset prices. Time is fast running out for Asia’s weaker economies to prepare for the shock.
Rest of the Story
Think small sell it as an education tool for kids...almost as the next pet rock...kids can grow food to feed their goldfish. When you make your first million then you can scale the process to feed the world.
Think small and use social funding to help the quality of life of the poor and the money will follow....the concept only has to meet the needs of the self to support only needs of the one. Once we go beyond the self we create money and trade, draw lines in the sand and protect the outer border of the collective.
The best way to reduce the carbon footprint is to remove 12 billion natio from the humus.
The market shift is from coal to Natural Gas until clean coal comes into play...EPA regulation is pushing coal out of the market.
Coal Overview
Here’s why Central Appalachia’s coal industry is dying
The shadow banks and 50:1 trading leverage game caused the problem, the Fed's and Central Banks have printing money into the global system to re-inflate the bubble.
The Hidden Cost of Bank Bailouts
The problem is that at the end of the day the US DOLLAR is backed by the full-faith of the Government to tax it's people.
Adani Ports, Visakha Container Terminal seek Cabotage relief
EC to scrutinise box lines in test case for container industry
Rest of the Story
Shipping fees: Federal law increases transport costs tenfold
So much for free shipping.
Moving a container here from Los Angeles costs nearly 10 times more than moving that same container from Los Angeles to Shanghai, some three times farther.
The Freight of All Kinds rate to ship a 40-foot container from Los Angeles to Shanghai is $790. Matson, Hawaii’s largest carrier, charges $8,700 to ship that same container from Los Angeles to Honolulu, according to the company’s website.
Shipping that container from Hong Kong to Los Angeles is $1,986; from Shanghai, to Los Angeles, $1,885.
Hawaii Pacific University economist Ken Schoolland
Soybeans Slip From 2-Month High as Rain Aids South America Crop
Soybean futures declined 6 percent this year as global output may climb to a record 283.5 million metric tons, spurred by bigger South American harvests, the USDA predicts.
“Weather conditions in Argentina and Brazil, as reported by the forecasters we follow, are ideal for the young crop,” Paul Georgy, the president of broker Allendale Inc., wrote in an online market comment.
Argentina’s soybean crop was 37 percent planted, the Rosario Grains Exchange reported Nov. 21. Soybeans in Brazil’s Mato Grosso state, the country’s biggest growing region, were 97 percent sown as of Nov. 22, according to researcher Instituto Mato-Grossense de Economia Agropecuaria.
Corn for delivery in March declined 1 percent to $4.27 a bushel and wheat for the same delivery month fell 0.6 percent to $6.5525 a bushel. Milling wheat for delivery in January traded on NYSE Liffe in Paris dropped 0.6 percent to 206 euros ($279) a ton.
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Thanks for the sorting out the background History....those were my cowboy days of investing and flushing money down the toilet.
Go DCM....
Baltic Supramax Index (Nov 22) 1404 UP + 11
Baltic Supramax Index Link
U.S. grains: Soybeans hit two-month high on export demand
Soybeans touched their highest price in more than two months on Monday, shaking off earlier losses on support from export demand and soaring soy meal.
Chicago Board of Trade wheat futures hit a two-week high as worries about harvests in Argentina and Australia bolstered potential demand for U.S. wheat.
Corn also rose, as funds covered part of their short positions in corn and wheat ahead of Thursday's Thanksgiving holiday.
January soybeans touched $13.34-1/2, the highest nearby price since Sept. 20 (all figures US$).
The turnaround was triggered by strength in soymeal, which surged 2.2 per cent due to tight cash supplies, as well as U.S. export inspections data that pointed to strong Chinese demand for soybeans, said Terry Reilly, senior commodity analyst at Futures International in Chicago.
"The export inspections came out below expectations, but they were very strong for China," Reilly said.
CBOT January soybeans rose 0.7 per cent, or 9-3/4 cents, to $13.29-1/4 a bushel, building on Friday's 2.2 per cent gain.
Exporters sold 120,000 tonnes of U.S. soybeans to unknown destinations for 2014-15 delivery, the U.S. Agriculture Department said on Monday.
USDA on Friday confirmed sales of 115,000 tonnes of U.S. soybeans to China, after reporting on Thursday weekly soybean sales well above expectations at nearly 1.4 million tonnes.
Chicago Board of Trade December wheat rose 0.5 per cent, or three cents, to $6.52-1/2 a bushel, climbing for a third straight session. It earlier reached $6.55, a front-month level last reached on Nov. 11.
"Funds have (previously) been heavy sellers in the wheat pit and they're sitting relatively short on corn, so we're seeing a bit of buying, because CBOT will be closed on Thursday, short day on Friday," said Karl Setzer, market analyst at MaxYield Co-op in West Bend, Iowa.
Improving competitiveness of U.S. wheat, as suggested by strong weekly export data last week, and worries about weather damage in key exporters Argentina and Australia have helped stir Chicago futures.
"Previously, you have seen tenders bypassing U.S. wheat, but now with Australia for one seeing unfavourable weather conditions, this could shift demand to the U.S," said Vanessa Tan, investment analyst at Phillip Futures Singapore.
Unseasonal rains in Western Australia and frost on the country's east coast have hit wheat crops in the world's No. 2 exporter of the grain, dragging down quality and reducing harvests.
Elsewhere, the Rosario Grains Exchange last week forecast Argentina's wheat crop at 9.1 million tonnes in its first estimate of the season, well below the 11-million-tonne view of the U.S. Department of Agriculture.
CBOT December corn added 0.6 per cent, or 2-1/2 cents, at $4.24-3/4 a bushel, picking up support from a strong U.S. cash market, Setzer said.
The trade was awaiting USDA's weekly report on crop progress and conditions, due Monday at 3 p.m. CDT. The corn harvest was likely 95 per cent complete as of Nov. 24, up four percentage points from a week earlier, according to the average of estimates in a Reuters poll of 11 analysts.
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EU wheat at five-month peak on bullish exports
Wheat futures in Chicago also rose on Monday, reaching a two-week
high with support from weather concerns in Argentina and Australia that could divert demand towards U.S. wheat. But weekly U.S. export inspections for wheat later came in at the low end of expectations.
Traders also reported on Monday that Iranian private buyers were inquiring about booking around 300,000 tonnes or more of milling wheat, in a sign a weekend agreement over Iran's nuclear programme could ease difficulties in financing import deals.
But traders cautioned that it may take some time for financing to become viable again for private importers in Iran. The country's state buyer has bought a large amount of EU wheat in the past year, notably from Germany and the Baltic countries.
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Rotflmao....this one the funnest exchanges of posting I've seen in along time...maybe you two should go on the road with your act.
The major teu shippers are proposing an increase in the teu shipping rate. I posted the news on the teu board. I'm on a smartphone and it's hard to type with fat fingers.
Good play, I may have switch over later after the first of the year.
Crude oil prices dropping which will help the profits of the companies, 70 percent of the shipping cost is the fuel....
Why Goldman Sachs’ predicted 15% iron ore price fall helps Soros
Lower iron ore prices will be one of the major catalysts for higher dry bulk shipping rates in 2014. According to a recent Bloomberg article on Goldman Sachs’ forecast for iron ore prices in 2014, gold, iron ore , soybeans, and copper are all expected to drop at least 15% next year due to supply increases....
Soros Source Link
The story of dry bulk shipping growth doesn’t just stop at falling iron ore prices. For iron ore producers to keep expanding projects, they must expect prices to remain favorable when additional capacity comes online. Recent commentaries on currency rates and reforms have been encouraging, and they should positively impact demand for dry bulk vessels in 2014 and 2015.
Currency Rate Link
Eastbound Pacific Carriers Seek 2-Stage Rate Increase
Container shipping lines operating from Asia to the U.S. intend to restore baseline freight rates for late holiday season shipments in December and the pre-Lunar New Year period in January.
Member lines in the Transpacific Stabilization Agreement have plans to collectively adopt general rate increases of $200 per 40-foot container, effective Dec. 20, 2013, and $300 per 40-foot container, beginning Jan. 15, 2014, for the Asia-to-U.S. trade lane. The carriers hope the two-stage increase in freight rates will capitalize on “pockets of particular strength” in the eastbound route and will take advantage of the opportunity for a “badly needed” revenue recovery, according to the TSA.
Freight rate levels in the trade are “still well below sustainable levels,” even after achieving partial success with a previous Nov. 15 increase, the TSA said. Spot container rates from Asia to the U.S. East and West coasts measured by the Shanghai Containerized Freight Index increased more than $100 per 40-foot container in the week of Nov. 15, but the TSA had recommended an increase of $400 in all Asia-U.S. lanes.
“The central truth in this market is that every carrier is operating at a loss,” said Brian Conrad, TSA executive administrator, in a written statement. “Some may achieve net profit from cost-cutting, but the revenue line in each case is lower, and that has long-term service implications for customers.”
Conrad acknowledged the difficulty of raising rates in a highly competitive market, but said that pressures on carriers from capital markets and parent companies to improve profitability are gradually overtaking supply-demand considerations.
“There is an unrealistic perception that we have a huge capacity gap from Asia to the U.S. and therefore that rates charged in the short-term transactional market should serve as benchmarks for the entire trade in 12-month contracts,” Conrad said. “This thinking devalues the service provided, ignores rising fuel, equipment and operating costs, and has now begun to affect the ability of container lines to access capital markets and even government support for the future.”
TSA container lines said they cannot accept contract demands for 2014-15 rates that are based on, or below, current short-term levels, and they cannot agree to provisions that extend free-time allowances, absorb a portion of chassis-related costs as carriers are exiting that business or mitigate fuel surcharges. As a result, TSA container lines said they see the scheduled December and January rate adjustments as “setting the table” for “significant” additional increases contained in 2014-15 contracts.
The Transpacific Stabilization Agreement, a forum for container lines serving trade from Asia to ports and inland points in the U.S., includes APL, China Shipping Container Lines, CMA CGM, Cosco Container Lines, Evergreen Line, Hanjin Shipping, Hapag-Lloyd, Hyundai Merchant Marine, “K” Line, Maersk Line, Mediterranean Shipping Co., NYK Line, OOCL, Yang Ming Marine Transport and Zim Integrated Shipping Services.
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SCFI: Shanghai-to-US Spot Container Rates Dip
Spot container rates from Asia to the U.S. East and West coasts measured by the Shanghai Containerized Freight Index saw slight declines only one week after moving higher around a general rate increase recommended by the Transpacific Stabilization Agreement of $400 per 40-foot container in all Asia-U.S. lanes, set for Nov. 15.
The spot rate from Shanghai to the U.S. West Coast slipped 1.9 percent, or $36, from the previous week to $1,849 per FEU, according to SCFI data issued by the Shanghai Shipping Exchange. Before last week’s increase, rates in this lane had declined for eight straight weeks. The spot rate in the week ending Nov. 22 is 11.5 percent below the level in the same week last year and 16.7 percent less than at the beginning of 2013.
The spot rate to the U.S. East Coast edged down 1.0 percent, or $33 per FEU, to $3,151 in the week ending Nov. 22. Despite the drop, the current rate remains up 0.2 percent year-over-year, but is down 6.2 percent from Jan. 1.
The member lines in the Transpacific Stabilization Agreement are now attempting a 2-stage rate increase, adopting general rate increases of $200 per 40-foot container, effective Dec. 20, 2013, and $300 per 40-foot container, beginning Jan. 15, 2014, for the Asia-to-U.S. trade lane.
New Source
China to Take Iron Ore Pricing Power From Miners
China will take control of iron ore pricing in the next two years as rising supplies of the steelmaking commodity return bargaining power to buyers, former Noble Group Ltd. Vice Chairman Harry Banga said.
Prices of the second-biggest seaborne commodity will drop to $95 to $110 a metric ton, said Banga, who in May started The Caravel Group Ltd. Iron ore traded at $135.90 a ton at the Chinese port of Tianjin yesterday.
Mine expansions by producers including Rio Tinto Group and BHP Billiton Ltd. (BHP) will push the market into a surplus next year, and the 82 million-ton glut will be the most since at least 2008, Goldman Sachs Group Inc. said in August.
The shift in bargaining power may also spur an expansion of the iron ore securities market in Asia, Banga said,“Buyers will be calling the shots,” 63-year-old Banga, who has traded iron ore for almost 20 years, said in an interview in Hong Kong. “It will change very quickly over the next two years and the Chinese will then control more of the pricing.”
Securities Market
Contract volumes for iron ore securities traded may potentially reach twice the size of the almost 1.2 billion ton physical market as a new generation of overseas-educated managers at Chinese steelmakers will be more willing to use the contracts to hedge risks, Banga said.
Contracts traded on exchanges including the Singapore Exchange Ltd. and Dalian Commodity Exchange will account for about 130 million tons to 150 million tons this year, he estimated.
“The growth in the last three years itself is tremendous and it’s just the tip of the iceberg,” he said of the contracts.
Record iron imports by China, the biggest steelmaking nation, in September and gains in October don’t represent a reversal of the trend of slowing demand, Banga said. Mills are just stocking up ahead of the Chinese New Year holidays in January when trains will shift to moving passengers instead of cargo, he said.
Price Rally
The commodity has rallied 23 percent from this year’s low on May 31 and is up 57 percent from September last year when prices touched an almost-three-year low. Iron ore entered a bull market in July as China’s economy accelerated, spurring Standard Bank Group Ltd. and Australia’s Bureau of Resources and Energy Economics to increase price estimates in the past few weeks.
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Rain Slowing French Corn Harvest Widens Premium to U.S. Prices
France’s corn harvest, the biggest in the European Union, is being delayed by excess rain, slowing exports from the country and pushing up prices for the grain relative to those in the U.S.
Farmers in the main French growing regions still needed to harvest 42 percent of their crops as of Nov. 11, compared with just 12 percent at the same time last year, according to crop office FranceAgriMer.
Growing areas in the southwest, center and northeast had two-to-three times the normal amount of rain in the last two weeks, after the northeast saw double the average precipitation in October, AccuWeather Inc. said.“Soil moisture is a real disaster,” Renaud de Kerpoisson, the president of Bourges, France-based farm adviser Offre & Demande Agricole, said in an interview last week. “There is not enough corn on the market at this moment and everybody is waiting for the harvest.”
Corn for January delivery on NYSE Liffe in Paris closed at 174 euros ($234.93) a metric ton on Nov. 15, about 50 euros more expensive than December futures on the Chicago Board of Trade, the contract closest to expiration. The premium widened from 17 euros a ton in June, while the price difference between contracts with those delivery months was 32 euros a ton at this time last year. Corn has still tumbled on both exchanges in 2013 on the outlook for record production worldwide.
The EU issued licenses for French shippers to export 166,583 tons of corn since the marketing year began July 1, 12 percent less than at this time last year, according to online data from the 28-country bloc. French corn exports may total 5.62 million tons during the 2013-14 season, down 14 percent from last year and below a previous forecast of 5.91 million tons, FranceAgriMer said Nov. 13. It also cut its estimate for the French harvest by 1.4 percent to 15.16 million tons.
French Corn
Spot prices for French corn in Bordeaux were $237.85 a ton as of Nov. 14, or $22.70 more expensive than U.S. grain at the Gulf of Mexico at $215.15 a ton, said Nathan Kemp, an economist at the International Grains Council in London. French prices were near parity or at a discount to the U.S. from mid-August to mid-September, IGC data show. The U.S. is the biggest exporter.
Harvest is progressing slowest in southwest France, with 37 percent of crops collected in Aquitaine and 45 percent in Midi-Pyrenees as of Nov. 11, compared with a 90 and 95 percent pace respectively last year, FranceAgriMer said. Agen, France, located in Aquitaine, had 3.5 inches (8.9 centimeters) of rain in the first two weeks of November, compared with normal rainfall of 1 inch, said Dale Mohler, a senior meteorologist at AccuWeather.
Precipitation may slow fieldwork further this week, with western and central France expected to receive an inch of rain from storms starting Nov. 20, Mohler said. Northeastern regions may be drier, he said.
Farmers “don’t harvest if it’s too wet, so they need days with sun for things to dry out,” Mohler said. “This time of year the sun is pretty low, and it takes longer to dry out than it would in September.”
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Grain futures - weekly outlook: November 25 - 29
U.S. grain futures ended Friday’s session mixed, with soy prices rallying sharply to hit an eight-week high amid ongoing indications of robust demand for U.S. supplies.
On the Chicago Mercantile Exchange, soybeans for January delivery jumped 2.17% on Friday to settle the week at USD13.1940 a bushel by close of trade.
Prices of the oilseed rose to a daily high of USD13.2200 a bushel earlier, the strongest level since September 27.
The January contract ended Thursday’s session up 1.39% to settle at USD12.9140 a bushel.
On the week, the January soybean contract advanced 2.95%.
The U.S. Department of Agriculture confirmed private sales of 115,000 tonnes of U.S. soybeans to China on Friday.
That followed a weekly USDA export report on Thursday which showed soybean sales last week well above expectations.
Meanwhile, corn futures for March delivery declined 0.06% on Friday to settle the week at USD4.2920 a bushel. Corn prices rose to a session high of USD4.3220 a bushel earlier, the strongest level since November 13.
The March contract settled 1% higher on Thursday to end at USD4.2940 a bushel after the USDA said net corn export sales totaled 945,100 tonnes last week, at the high end of trade expectations for 750,000 to 950,000 tonnes.
On the week, the December corn contract advanced 1.67%, the first weekly gain in five weeks.
Corn prices have been on a downward trend in recent months amid expectations this year’s corn harvest in the U.S. will be the largest on record. Prices of the grain slumped to a four-year low of USD4.1540 a bushel on November 8.
Elsewhere on the Chicago Board of Trade, wheat for March delivery rose 0.34% on Friday to settle the week at USD6.5700 a bushel. Earlier in the day, wheat prices climbed to a session high of USD6.6000 a bushel, the strongest level since November 11.
CBOT March wheat prices inched down 0.11% on Thursday to settle at USD6.5460 a bushel.
The March wheat contract ended the week with a gain of 1.91%, the first weekly advance in five weeks.
Wheat prices remained supported amid concerns over crop conditions in key southern hemisphere exporters.
In the week ahead, market players will focus on the release of key weekly USDA data, including crop progress numbers on Monday and export sales figures on Thursday.
Corn is the biggest U.S. crop, followed by soybeans, government figures show. Wheat was fourth, behind hay.
grain-futures
Baltic Supramax Index (Nov 22) 1393 UP + 15
Baltic Supramax Index Link
This baby will run once the two ships are released from the creditors and the other ships are repaired....wait for the news
Late-season rains boosted U.S. crops more than the government said last month, R.J. O’Brien & Associates predicted today. Corn production will rise to 13.91 billion bushels, above the USDA forecast of 13.843 billion estimated Sept. 12, the broker said in an e-mailed report to clients. Soybean output will rise to 3.211 billion, above the government’s forecast of 3.149 billion.
At the same time, a decline in the U.S. dollar means that soybeans are cheaper to export. In the past, the Argentine peso and the Brazilian real have been valued below the dollar resulting in their soybeans costing less than U.S. soybeans in the international marketplace, as soybeans are generally priced in U.S. dollars...
No need to stick a fork in FREE yet...
Global Grain Trade
BHP Billiton looks to lift production as China growth remains key driver
Global mining giant BHP Billiton (LON:BLT) expects to lift production over the next two years but said a slowdown in China was dragging on growth.
The group, which operates in 26 countries, held its AGM in Perth on Thursday and chief executive Andrew Mackenzie drew attention to the firm's 2013 results in August, which showed record production in a number of commodities and US$2.7 billion of annual cost savings.
"Our focus on productivity is extracting more value from existing operations," he told the meeting.
"Over the next two years, we expect to increase production by eight per cent per year, on a copper equivalent basis, and deliver additional productivity-led cost savings.
"We are increasing our focus on our 'four pillars': iron ore; petroleum; copper; and coal, and we continue to operate our aluminium, manganese and nickel businesses as efficiently as possible."
He said the group's strong operating performance this year was underlined by a 13th consecutive year of record production at the Western Australia iron ore operations and a 28% increase in production at the Escondida copper mine in Chile.
The firm says conditions remain challenging in Europe, but in Asia sees overall growth.
However, in China, which accounts for around 30% of group revenue, the weaker trade and manufacturing activity due to the global slowdown has weighed, it said.
However, the future looks brighter, pointed out chairman Jac Nasser.
"We expect the Chinese economy to grow at over 7% next year.
"China and other emerging economies will be the major drivers of global economic growth in the long term, which could deliver up to a 75% increase in demand for some commodities over the next 15 years."
Nasser added: "Only a few countries in the world are well placed to supply this increased demand for commodities, and Australia is one of them.
"Therefore, we believe your company remains well positioned to contribute to the prosperity of the regions where we operate, including Australia."
Nasser notes that in the last two decades, more than 650 million people have been lifted out of poverty in China alone and it is expected that another 250mln will move to the cities over the next 15 years.
BHP is the only company to offer a broad-based exposure to steel making, metals, energy and food, the chief executive told the meeting, and he made particular reference to the fertiliser potash, demand for which he expects to grow by 2-3% a year by 2030.
This growth, he said, will be driven by a rising population and greater economic prosperity, which will change the patterns of food consumption, requiring higher yields from increasingly-constrained arable land.
The firm said it has an average annual investment in potash of US$800 mln, which it expects to continue.
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Soybeans Rise to One-Week High as Demand for U.S. Supply Climbs
Soybeans rose to a one-week high in Chicago, topping $13 a bushel, on signs demand is increasing for supplies from the U.S., the world’s second-biggest exporter.
U.S. export sales of soybeans climbed to 1.38 million metric tons in the week ended Nov. 14, up 51 percent from the prior week, the U.S. Department of Agriculture said yesterday. China, the world’s top importer, bought 84 percent of the total. Soybeans fell 7.4 percent this year as global production may climb to a record 283.5 million tons, spurred by an expected jump in South American output, the USDA estimates.
"The U.S. soybean harvest is nearing completion and we see strong nearby demand for beans," Jonathan Lane, a trading manager at Gleadell Agriculture Ltd. in Gainsborough, England, said in an e-mailed report today. "In South America plantings continue and currently there are no major problems reported."
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How does China play a central role in America’s garbage exports?
To be clear: the U.S. doesn’t export garbage to China. With some of the cheapest landfill prices in the world, that wouldn’t make any economic sense whatsoever. Rather, what the U.S. exports to China are recyclables that aren’t being recycled at home. Currently, the U.S. exports around 40 percent of the recyclable materials that it generates. This includes vast amounts of newsprint and cardboard, metals, and plastics. The primary reason that this material goes overseas is that the United States simply generates more recyclable waste than it can manufacture into new products. Despite the ongoing decline of American manufacturing, this is an old story: the U.S. has been exporting scrap to the world dating back to the early 20th century.
Today, scrap recyclables are the biggest volume export from the U.S. to China. In short, the U.S. has a lot of recyclables it doesn’t need, and China needs recyclables. It’s the perfect match between supplier and customers.
Yet this isn’t just a story of supply and demand; it’s also a story about shipping. Currently, China exports much more in the way of goods to the U.S. than the U.S. returns to China. As a result, American ports are filled with empty containers awaiting cargoes to ship back to China so that the containers can then be shipped back to the U.S.. As a result, it’s possible to ship a 40-foot container of scrap from Los Angeles to China for around $300. Meanwhile, it’ll cost eight times that amount to ship the same container by rail or truck from Los Angeles to Chicago. That’s a huge differential which creates an incentive for China to import American recyclables. It’s worth noting, too, that a similar dynamic exists between Europe and China, and any other developed country that has a trade imbalance with the Chinese.
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Understanding China’s Arctic Policies
China is playing a prudent long game in the region, with economics the driving factor.
The potential commercial benefits of cargo transportation through the Arctic in comparison to the Suez Canal also seem appealing. In August and September 2009 two German heavy-lift vessels, MV Beluga Foresight and MV Beluga Fraternity carried a cargo of steel pipes from Arkhangelsk (Russia) to Nigeria using the Northern Sea Route. The new passage shortened the distance for 3000 nautical miles and reduced fuel consumption by 200 tons per vessel, resulting in savings of 600 000 U.S. dollars.
A year later, the Hong Kong vessel MV Nordic Barents transported iron ore from Kirkenes (Norway) to Shanghai using the same route and cut expenses on $180,000.
In 2012, 46 vessels carried more than 1.2 million tonnes of cargo through the Northern Sea Route, up 53 percent compared with 2011.
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Baltic Supramax Index 1378 UP + 7
Eagle Bulk Shipping (EGLE) 3.17 UP + 0.37 (13.21%)
EGLE fleet is comprised of Supramax ships....
Baltic Supramax Index
Korea Line Corp 19,300.00 UP +200.00 (1.05%)
EGLE has KLC shares on the books....
Korea Line Corp
Latest 10-Q at the SEC for DD review and research on the company.
EGLE 10-Q
Frost, rains hit Australia wheat crop, drag on quality
Unseasonal rains in Western Australia and frost on the country's east coast have hit wheat crops in the world's No.2 exporter of the grain, dragging down quality and reducing harvests.
A decline in supply of high-protein wheat from Australia could force major buyers such as Indonesia and China to seek more volumes from the United States and Canada, underpinning prices there.
Australian wheat has seen strong demand this year, with almost half of estimated exports for 2013/14 already sold by traders. China has been at the forefront of this buying after its own crop was damaged by unfavourable weather earlier in 2013.
"The impact of frost damage is a greater proportion of small seeds," said Luke Mathews, commodities strategist at the Commonwealth Bank of Australia, referring to grain that must be removed before milling. Crops must contain no more than a limited number of undersized seeds to meet standards set by trade body Grain Trade Australia.
"We are seeing screenings (for small seeds) coming in from the east coast harvest higher than we would normally expect, which can obviously push the grades down," Mathews added.
Unsure about grain quality, Australian farmers have been reluctant to forward sell their crops, leading to shortages in the market. About a quarter of the country's wheat crop has been harvested.
"Traders have been able to cover just about 30 percent of what they have sold," said one Sydney-based broker. "Growers are not selling and offshore demand is very strong."
The crop in parts of New South Wales and Victoria was hit by frost last month, although other regions of the eastern grain belt, including Queensland, have produced high-protein wheat.
GrainCorp last week warned of the impact of unfavourable weather in areas of New South Wales. "We expect the harvest (quality) to be revised down because of the frost damage," said Alison Watkins, the company's chief executive and managing director. "To what extent, is not yet clear."
Elsewhere, unseasonal rains are likely to hurt wheat quality and output in Western Australia, where harvesting is 10 percent complete.
Going to America?
Crop-downgrades in Australia are likely to create more demand for hard red winter wheat traded on the Kansas City Board of Trade and spring wheat on the Minneapolis Grains Exchange.
U.S. hard red winter wheat prices dropped to a two-month low on Monday, the same day that spring wheat slid to lowest since June, 2012 as U.S. shipments face stiff competition in the international market.
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365 days from the last meeting, plus or minus 15 days